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Sunday, October 24, 2010

Homebuyer Tip: Use Carrying Costs as a Negotiation Factor

Regardless of what the politicians and talking heads say, no one can predict the future [accurately].

Will mortgage interest rates rise? [Probably, since they are so low!]

Will a flood of foreclosures cause housing prices in your neighborhood to decline even more? [Real estate is local. Know thy neighborhood.]

As a seller of a house in Brevard County Florida, with over 5,000 houses on the market, is it worth rejecting an offer now to risk maybe a higher offer next month? [In the words of the old cliche "Is a bird in the hand really worth two in the bush?"]

Sellers should take the cost of holding a house for another month or several months into consideration when mulling over an offer. If the sale is due to a job change and one spouse has already relocated, there is the cost of maintaining two residences. What about the cost of mortgage, taxes, insurance, etc? Is there some looming repair? Is the house already vacant?

Evaluation of an offer, with goals in mind, knowing what the lowest acceptable price as well as carrying costs while awaiting another offer, is especially key in a buyer's market.